Fire, the wheel, and the internet have already been invented. Which means we’ll rarely be designing something nobody has ever seen before. So the question isn’t how to build something from scratch – it’s how to stand out in a crowd, or decide consciously not to bother joining one.
My competitive analysis toolkit has three tools. They’re basic, they support each other, and they work well in workshops because they’re easy to explain.
Step 0: Before you start
Define why you’re doing this analysis and for whom. Pick your competitors sensibly – leaders, innovators, and disruptors are usually a good starting set. Agree on your sources: official competitor materials, reviews, industry reports, your own research.
Step 1: Quick SWOT per competitor
Not to produce a grand strategic document. Just to organise observations. Strengths and weaknesses on the inside, opportunities and threats on the outside.
Step 2: Group the findings
Once you have SWOTs for several competitors, group the observations into categories: value proposition, communication frame, development vector, experience type, available features, technology, pricing model, integrations, user base, and so on. Patterns start to emerge. Marketing will also be quietly pleased.
Step 3: Value curve
This is where competitor offers meet the actual values of the segment you’re designing for. Plot each competitor against the dimensions that matter to your users. Two things become visible: the market standard, and the gaps nobody is covering.
Step 4: Kotler’s product levels
The value curve tells you what’s generic and what’s expected. Kotler’s five levels help you configure your own offer: core product, generic product, expected product, augmented product, and potential product. The gaps from step 4 are your candidates for augmented and potential – your actual competitive edge.
How elegant!